Here is a thought piece by an economist who actually agrees with me - auditing the Fed is a good idea, while ending the Fed is an entirely implausible idea:

"Eliminating the Federal Reserve in an idealist vacuum is a compelling idea. In today's world, however, eliminating the Fed would be tantamount to handing over the keys of our financial system to the European Union, China or any foreign economic power with a strong central bank."

As Paul's original bill to audit the Fed has moved through congress, new alternative legislation seeking to weaken the audit has arisen. The new bill, unlike Paul's, protects Fed interest rate decisions and mechanisms, along with most 2008 emergency funding, from the audit. Paul claims his bill has been entirely gutted. That remains to be seen as the House Financial Services Committee considers the measures starting tomorrow:

And here is a HuffPo expose outing the economists Watt has trotted out against the audit as being deeply involved with the Federal Reserve. Watchin the Fed try to circle the wagons on this one is going to be entertaining:

In his latest attempt to circle the wagons, Mr. Bernanke has penned a thought piece asserting that the House's attempt to audit the Fed will severely damage the American economy. I quote:

"These measures are very much out of step with the global consensus on the appropriate role of central banks, and they would seriously impair the prospects for economic and financial stability in the United States."

Come on Ben, is that really the best you can do? Was not every central bank around the globe very much out of step with reality over the past decade? Why should the Fed take the lead in wall street friendly financial reform, but all of a sudden be a follower of other central banks when it comes to figuring out what went wrong inside the Fed and how to prevent it from happening again.

There is only one way to truly understand how this crisis developed, and that is to allow independent parties to take a close look at the Fed's financial patronage and machinations over the last decade. An audit - a slippery slope indeed...

But as you listen to the dire warnings coming from those supposedly all-knowing, know this: throughout history, anytime citizens have sought to subject private opaque institutions and interests to democratic monitoring, the institutions and interests in question have inevitably warned of the most direst of consequences should their elite judgements be questioned. They were, time and again, wrong. As is Bernanke now:

The following article is very Ron Paul centric, and reviews how the Audit the Fed bill got to the pleasent place it now rests (waiting to be taken up again). Funny thing is, since Paul's bill will be tacked onto other financial reform legislation if and when it does pass, Paul will not be voting for it. Love him or hate him (I do neither), you must admit Ron Paul is a muthafuckin character:

The Audit the Fed bill has passed the House (attached to a huge financial reform package). Now let's see what kind of machinations the Senate puts forth in order to thwart this thing. Momentum remains on the side of sunlight for now....

Although i would argue that this move was likely covered by the Fed's emergency powers, invoked perhaps just after the original trades, the key point here is that the people currently have no idea what kind of value-less junk sits on the Fed's bloated balance sheet, or which TBTF org the junk came from. How is the Fed going to sell that junk when they are scared to even detail what the junk actually is? In the end, the Fed can dispose of that junk in one of three ways - have the people fund the write-off, have the banks fund the write-off (when and if they are solvent), inflate the debt away by leaving it on the Fed's balance sheet thereby leaving the money in the system forever.

Which do you choose? Do you want a say? Then AUDIT THE FED!

Mon Mar 22, 2010 4:05 pm

Joshua Kane

Joined: 14 Jul 2008
Posts: 670
Location: Carlsbad, CA

An amendment allowing for a one-time audit of the Fed has been passed and attached to the financial regulation overhaul bill making its way through congress. This sounds all well and good, but is actually a bit problematic. The audit will only cover the emergency measures taken by the Fed starting in December 2007 and ending in 2009. The original audit the Fed bill was supposed to create a vehicle through which the Fed could be audited yearly while still maintaining independence in determining monetary policy. In my opinion, a chance for greater transparency in daily monetary machinations has been missed. Then again, at least we will get to peer deeply into the Fed's actions as crisis swamped the system. It is a start: